The rollout of IBIT-linked products by both banks could redirect capital flows, affecting market sentiment and trading behavior.
In 2025, a series of strategic moves by major financial institutions, notably JPMorgan and Morgan Stanley, have drawn renewed attention to the crypto market, particularly Bitcoin.
Analysts tracking institutional behavior note that these maneuvers, ranging from margin adjustments on MicroStrategy (MSTR) stock to the release of IBIT-linked structured products, coincided with heightened volatility in BTC and BTC-heavy equities.
According to CryptoRover on X, the timeline suggests these actions may have influenced market flows and investor sentiment throughout the year.
The institutional narrative began in May 2025, when prominent investor Jim Chanos publicly declared he was long Bitcoin but short MicroStrategy.
This announcement established a market narrative that effectively supported Bitcoin while positioning MSTR as a risk-laden vehicle.
By July 2025, JPMorgan allegedly raised the margin requirement for MSTR from 50% to 95%, a move that significantly increased the likelihood of forced liquidations for those unable to post additional collateral.
These developments came weeks before MSCI released a consultation note scrutinizing companies with over 50% of assets in digital holdings, including MSTR.
In parallel, both banks prepared to offer Bitcoin exposure through structured products. Morgan Stanley filed for an IBIT-linked product with the SEC.
The crypto market took a sharp turn in late November 2025, with Bitcoin dipping below $90,000 amid whispers of institutional maneuvering that have traders questioning whether Wall Street’s biggest players engineered the sell-off.
Crypto commentator @cryptorover laid it bare in a X post:
“JPMorgan and Morgan Stanley’s timed filings for Bitcoin-linked products, coupled with margin hikes and resurfaced index exclusion risks, appear to have funneled capital away from direct proxies like Strategy Inc. (NASDAQ: MSTR) toward their own offerings.”
As MSTR shares plummeted 43% from October highs, wiping out $20 billion in market cap, the crypto market’s total capitalization shed 12% to $3.1 trillion, per CoinMarketCap data.
The sequence began in May 2025, when hedge fund manager Jim Chanos declared he was long Bitcoin but short Strategy, the largest public BTC holder.
Chanos’s bet, detailed in a Bloomberg interview that month, framed MSTR as overleveraged despite its 1.16x NAV multiple, the lowest in the cycle, per JPMorgan’s November 20 note.
This narrative gained legs, pressuring MSTR shares even as Bitcoin climbed 45% through summer.
Fast forward to July 2025, JPMorgan allegedly hiked MSTR’s margin requirement from 50% to 95%, a move buried in brokerage.
Higher margins demand more collateral, triggering forced sales if prices dip, which is exactly what unfolded in October’s 30% BTC rout.
Crypto Rover noted in his thread:
“This move alone weakened MSTR weeks before any MSCI news existed.”
August brought escalation. JPMorgan launched documents for a structured product linked to BlackRock’s IBIT ETF, offering indirect Bitcoin exposure with lower volatility, as filed with the SEC on August 12.
Morgan Stanley, MSCI’s original parent until its 2007 spinoff, had already dipped toes via similar wrappers.
Then, on October 10, MSCI’s consultation note questioned classifying firms with over 50% assets in digital holdings as “operating companies,” per the document.
Four days later, Morgan Stanley filed for an IBIT-linked product with the SEC, timed to capitalize on the uncertainty.
The crescendo hit November 20. JPMorgan simultaneously published IBIT Note sales docs and republished MSCI risks in a client alert, as @cryptorover highlighted.
Two weeks prior, the bank filed its own IBIT product. MSTR’s short interest, at 9.74% of float on November 15 per Nasdaq, ticked up 0.5% amid the noise.
Meanwhile IBIT inflows surged $1.2 billion that week, Farside Investors reported November 22.
These actions reveal a deliberate pivot in the crypto market. Digital asset treasuries (DATs) like Strategy, MSTR stock trading at 3x NAV in May, now face structural headwinds.
The MSCI review, due January 2026, could bar DATs from passive indices, prompting $2.8 billion in forced sales by funds tracking them, JPMorgan estimated.
Crypto Rover put it bluntly: “Weaken MSTR liquidity. Launch Bitcoin-exposure bank products. Raise doubts about BTC-heavy public companies.”
Institutional flows tell the tale. Wall Street trimmed $5.38 billion in MSTR holdings during Q3 2025, per 13F filings analyzed by TheStreet on November 24, redirecting to ETFs.
BlackRock’s IBIT, with $42 billion AUM as of November 28 per its site, captured 70% of spot Bitcoin ETF inflows YTD — $15.2 billion — while Grayscale’s GBTC saw $2.1 billion outflows.
Morgan Stanley’s filings, including a November 6 SEC submission for BTC-linked notes, position it to siphon more, offering yields via embedded options that DATs can’t match without leverage risks.
In the broader crypto market, this redirection amplified the October-November correction. Bitcoin’s 28% drop from $126,300 on October 7 to $91,500 by November 19 outpaced by ETF AUM’s 35% plunge to $110 billion, per SoSoValue data on November 19.
Altcoins fared worse: Ethereum down 32%, Solana 25%, as liquidity chased safer wrappers. Yet on-chain metrics resist the gloom — whales accumulated 18,000 BTC during the dip, Santiment reported November 27, signaling conviction beneath the surface.
Replies to Crypto Rover’s thread mirrored trader frustration. @WagmiTraderX wrote: “They just shaking MSTR to fill their IBIT bags. Classic manipulation #BTC.”
@MoonboyAnalyst added: “They weakened MSTR, built their own BTC rails, then scooped the liquidity they created.”
Skeptics like @NextGenVisionar countered: “Dip was brutal, not rigged. Bull run reloading harder.”
This isn’t JPMorgan or Morgan Stanley’s first rodeo in the crypto market. Both FUDed Bitcoin for years, JPMorgan’s 2017 “Ponzi scheme” memo from CEO Jamie Dimon drew fines, yet now holds billions via ETFs.
Goldman Sachs, an early critic, manages $1.5 billion in BTC futures as of Q3 2025, per its filings. The pattern? Create doubt, buy low, productize access.
Chanos closed his MSTR short in late October, telling CNBC on November 1 the premium had collapsed to unsustainable levels.
But banks’ structured products, with embedded hedges, appeal to conservative clients wary of pure-play DATs.
JPMorgan’s November 20 alert, resurfacing MSCI risks, coincided with a 5% MSTR drop that day, per TradingView data.
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